Business Insurance: Be Sure Your Biz Is Properly Insured
Small companies, and especially those with fewer than 20 employees, don’t always understand or address the many business risks they face every day.
Daily Breeze:
… according to research just completed by the National Association of Insurance Commissioners (NAIC), millions of small businesses are putting more on the line than they realize every time they open the doors. For example:
1) About 41% of small businesses with fewer than 20 employees lack workers’ comp insurance, which state law requires for most companies. Workers’ comp protects business owners from claims by employees who have a work-related injury or illness. You need a separate policy for this specific type of coverage. Check with the state insurance department for what’s required.
2) Some 52% of small businesses lack commercial auto insurance. Most seem to rely on personal auto insurance. But personal policies typically have lower liability limits and may even exclude business-related liability. Commercial policies usually carry liability limits of $1 million or more, and may have provisions that cover rented and other non-owned vehicles, including employee cars driven for company business.
3) Only 47% of small businesses offer health insurance to their employees. And of those, 24% report changing fees, deductibles or other items in the past year to offset rising premiums.
4) Nearly half of all home-based businesses depend on their homeowners insurance to protect their business. But that can be a huge mistake since most homeowners policies severely limit coverage of business property and may totally exclude business-related liability claims. In some cases you may be able to add a simple endorsement to your existing homeowners policy that will increase coverage for business purposes.
5) And while 3-quarters of small businesses say they depend heavily on 1 or 2 key people for survival, only 22% carry key person life insurance a type of policy that helps a biz weather the death of a key employee or buy out the heirs if ownership rights are involved.
6) Likewise, barely one in three small businesses carries business interruption insurance, which covers expenses like payroll and utility bills that might continue after a fire, storm or other disaster shuts down a company…
